ADS 468x60

Pages

Sunday, March 13, 2011

If I do any more post about the iPad I'm going to have to rename the blog iPadanomics. But here's one more with links to relevant iPad 2 news.

- Forbes says 70% of iPad 2 buyers are new to the iPad
- How much does an iPad 2 costs to make? Depends on who you are asking, but the profit margins are pretty huge based on these estimates.
- Here's a movie created entirely on the iPhone 4 and edited on an ipad 2
- This guy paid $900 to be first in line to buy the new iPad
- This analyst says Apple sold 500,000 iPads this weekend
- Barely 20 years after the fall of communism, Russians are capitalizing on iPad 2 arbitrage

Here are a few ways to capitalize on Apple over the next few months:

1. Buy vertical call spreads. The Jan 12 345/355 call spread is currently going for around $500, and will return $500 if Apple is above $355 in January 2012.

2. Sell Apple cash secured puts. The Jan 12 $255 put is selling for $10.50. If apple is below $255 in January, you will have to buy 100 shares of apple for a net cost of $244.5. The $300 put is selling for $21.15. If Apple is over $300 in January, you keep the full $2,115 or have to own Apple for a net cost of $278ish. Seems like a good bet to me.

3. Sell covered calls on stock. Buy 100 shares of Apple and sell a Jan 12 $400 call for $24. You immediately lower your basis to around $327 and can still participate in any upward movement in the stock up until $400. Total return if Apple is above $400 in January is $7,300 per covered call or around 21%.

Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.